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Under which major headings the following items will be presented in the Balance sheet of a company as per Schedule VI Part I of the Companies Act, 1956?
(i) Loans provided repayable on demand
(ii) Goodwill
(iii) Copyrights
(iv) Loose tools
(v) Cheques
(vi) General Reserve
(vii) Stock of finished goods and
(viii) 9% Debentures repayable after three years
| Items | Major Head | Major-Head | Sub-Head |
| (i) | Loans provided repayable on demand | Current Assets | Short-Term Loans and Advances |
| (ii) | Goodwill | Non-Current Assets | Fixed Assets - Intangible Assets |
| (iii) | Copyrights | Non-Current Assets | Fixed Assets- Intangible Assets |
| (iv) | Loose Tools | Current Assets | Inventories |
| (v) | Cheques | Current Assets | Cash and Cash Equivalent |
| (vi) | General Reserve | Shareholder's Funds | Reserves and Surplus |
| (vii) | Stock of Finished Goods | Current Assets | Inventories |
| (viii) | 9% Debentures repayable after three years | Non-Current Liabilities | Long-Term Borrowings |
Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per revised Schedule-VI, Part-I of the Companies Act, 1956:
(i) Accrued Incomes
(ii) Loose Tools
(iii) Provision for employees benefits
(iv) Unpaid dividend
(v) Short-term loans
(vi) Long-term loans.
|
ITEMS |
SUB-HEAD |
|
(i) Accrued Incomes |
Other Current Assets |
|
(ii) Loose Tools |
Inventories |
|
(iii) Provision for Employees benefits |
Short-Term Provisions |
|
(iv) Unpaid Dividend |
Other Current Liabilities |
|
(v) Short-Term Loans |
Short-Term Borrowings |
|
(vi) Long-Term Loans |
Long-Term Borrowings |
Under which heads and sub-heads the following items will appear in the Balance Sheet of a company as per revised Schedule VI, Part-I of the Companies Act 1956.
i. Premium on Redemption of Debentures
ii. Loose Tools
iii. Balance with Banks
| Items | Heads | Sub-Heads |
| Premium on Redemption of Debentures | Non- Current Liabilities | Other Long-Term Liabilities |
| Loose Tools | Current Assets | Inventories |
| Balance with Banks | Current Assets | Cash and Cash Equivalents |
List the items which are shown under the heading current liabilities and provisions as per Schedule VI Part-I of the Companies' Act, 1956.
The following items are shown under the heading current liabilities and provisions under the companies Act 1956:
Current Liabilities:
a) Interest accrued and due on borrowings
b) Income received in advance
c) Unpaid dividend etc.
Provisions include:
a) Provision for dividend,
b) Provision for taxation,
c) Provision for warranties etc
One of the objectives of ‘Financial Statements Analysis’ is to identify the reasons for the change in the financial position of the enterprise, State two more objectives of this analysis.
The following are the two main objectives other than the one stated in the question.
1. To determine profitability with respect to sales and investments.
2. To make fore-cast and prepare budgets.
Name any two items that are shown under the head’ Other Current Liabilities’ and any two items that are shown under the head ‘Other Current Assets’ in the Balance Sheet of a company as per schedule III of the Companies Act, 2013
| Other Current Liabilities | Other Current Assets |
| Income received in advance | Prepaid Expenses |
| Unpaid Dividends | Taxes paid in advance |
Financial Statements are prepared following the constituent accounting concepts principles procedures and also the legal environment in which the business organisationoperate. These statements are the source of information on the basis of which conclusions are drawn about the profitability and financial position of a
company so that their users can easily understand and use them in their economic decisions in a meaningful way.
From the above statements identify any two values that a company should observe while preparing its financial statements. Also, State under which major headings and sub-headings the following items will be presented in the Balance Sheet of a company as per Schedule III of the Companies Act 2013.
(i) Capital Reserve
(ii) Calls-in-Advance
(iii) Loose Tools
(iv) Bank Overdraft
The values that must be observed by a company while preparing its financial statements are
(a) these statements must be drawn following the defined accounting concepts, principles and methods, and
(b) the financial statements should be drawn following the legal framework of the country of operations.
Proprietary Ratio of M Ltd. 0.80 : 1
| Transactions | Effects |
| (a) Obtained a loan from bank Rs 2,00,000 Payable after 5 years | Decrease, The total assets would increase with the amount of loan raised and proprietor's fund remains the same |
| (b) Purchased machinery for cash Rs 75,000 | No Change, Total Assets will increase and decrease by same amount |
| (c) Redeemed 5% Redeemable preference shares Rs 1,00,000 | Decrease, Proprietor's Funds and Total Assets both will decrease by same amount but the percentage change would be more in Proprietor's Fund already in ratio 0.80 : 1 |
| (d) Issued equity shares to vendors of machinery purchased of Rs. 4,00,000 | Increase, Even though both Proprietor’s Funds and Total Assets both will increase by same amount but the percentage change would be more in Proprietor's Fund |
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